A buyer near Yelahanka was offered a plot at a price that seemed too good to refuse, nearly a fifth below the going rate. The catch, the agent explained cheerfully, was that the deal would be done on a general power of attorney rather than a sale deed, to save on stamp duty and registration. It sounded like a smart shortcut. It was in fact a well known trap, one the Supreme Court has warned against in plain terms. A power of attorney can let someone act for you, but it cannot make you the owner of a property, and buyers who forget that can pay full price for something they never legally own.

The short answer. A general power of attorney, or GPA, does not transfer ownership of a property. The Supreme Court held in the Suraj Lamp case that so called GPA sales, whether by a power of attorney alone or a sale agreement combined with a power of attorney and a will, do not convey title. Only a registered sale deed can legally transfer immovable property. The trade off dangled in front of buyers is a lower price, because the seller avoids stamp duty and registration, but what you save in charges you lose in security, since you never become the legal owner.

This position was settled by the Supreme Court and is set out in legal summaries such as RestTheCase. Here is what it means for a Bengaluru buyer weighing such an offer.

What is a GPA sale and why is it offered?

A GPA sale is an arrangement where a property is handed over using a power of attorney instead of a registered sale deed. The seller gives the buyer a power of attorney, often bundled with an unregistered agreement to sell and sometimes a will, and the buyer takes possession as if it were a purchase. It is offered mainly to dodge the stamp duty and registration charges that a proper sale deed attracts, and sometimes to move properties with unclear title or restrictions that would not survive formal registration. The lower price is the bait.

The problem is that the very thing that makes it cheaper, avoiding registration, is what leaves the buyer exposed. Registration is not an optional cost. It is the step that creates ownership, and skipping it means skipping ownership itself.

What did the Supreme Court decide in Suraj Lamp?

The Supreme Court decided in Suraj Lamp and Industries versus State of Haryana that GPA transactions do not convey title or create ownership rights. The Court held that a general power of attorney is not equivalent to a sale deed and cannot transfer ownership, and that a sale agreement combined with a power of attorney and a will is no substitute for a registered conveyance. It described these arrangements as violative of public policy, because they were used to avoid registration, stamp duty, and the transparency that comes with a proper sale. The ruling was clear that immovable property can be lawfully transferred only by a registered deed of conveyance.

That judgment is why banks, courts, and careful buyers treat a GPA sale as defective. It is not a grey area or a matter of local practice. The highest court has said such transfers do not make you the owner.

Why does a GPA not make you the owner?

A GPA does not make you the owner because it is only an authority to act, not a transfer of the property itself. When someone gives you a power of attorney, they authorise you to do certain things on their behalf, but they remain the owner. The property still belongs to them in law, which is why they, or later their legal heirs, can still deal with it or dispute your possession. A registered sale deed is different in kind, not just in paperwork, because it actually conveys the ownership from seller to buyer.

There is a further danger built into the nature of a power of attorney. A power of attorney can generally be revoked by the person who gave it, so the seller could withdraw it, and it may lapse on the death of the principal. A buyer relying on it is holding an authority that can be pulled away, not a title that is theirs to keep.

What are the real risks to a buyer?

The real risks are that you hold no marketable title, cannot get a loan, and can be challenged by the true owner. Because a GPA does not convey ownership, you cannot cleanly sell, mortgage, or encumber the property, and banks generally refuse home loans against such properties, treating the title as defective. The original owner or their heirs can later claim the property, and revenue authorities will not record you as the owner in their mutation records. The table below sets a GPA based transfer against a registered sale deed so the gap is impossible to miss.

When is a power of attorney legitimately useful?

A power of attorney is legitimately useful to authorise someone to act for you, not to buy or sell in place of a sale deed. It has genuine uses. An owner living abroad may give a trusted relative a power of attorney to sign and register documents on their behalf, or to manage a property. In those cases the power of attorney supports a proper transaction, and the actual transfer still happens through a registered sale deed executed under that authority. The document is doing its real job, which is delegation, not conveyance.

The line to remember is simple. Using a power of attorney to let someone act for you in a registered sale is normal and lawful. Using it as the transfer itself, in place of a sale deed, is the arrangement the Supreme Court struck down. Our guide to the difference between an agreement to sell and a sale deed explains the same principle from another angle.

How should a Bengaluru buyer respond to a GPA offer?

Respond by insisting on a registered sale deed and treating a GPA only offer as a reason to walk away or investigate. If a seller can convey clear title, they can register a sale deed, so a refusal to do so usually signals a title problem, a dispute, or a restriction the seller would rather you not discover through registration. The discount rarely compensates for buying a property you cannot own, sell, or finance. Before you go near such a deal, verify the title and the project, as our guide to checking a project's RERA status describes, and a legitimate, registrable project such as Century Tisora in Yelahanka shows the kind of clean paperwork you should expect as standard.

It also helps to put the saving in perspective. The stamp duty and registration a GPA sale avoids are a modest share of the price, while the ownership you forfeit is the whole of it. Paying the proper charges buys you a title you can defend, finance, and sell, which is exactly what makes a home an asset rather than a liability. Framed that way, the discount on a GPA deal is not really a saving at all, it is the price of giving up the very thing you came to buy.

If you have already bought on a GPA, it is worth seeking legal advice on regularising the title, ideally by getting a proper registered sale deed executed while the seller is willing and available. The sooner that is done, the smaller the risk that revocation, death, or a rival claim closes the window.

What should you check before you agree to any transfer?

Run through these seven steps so a tempting discount never costs you your ownership.

1. Insist that the transfer happens through a registered sale deed, not a power of attorney.
2. Treat any GPA only offer as a signal to investigate the title, not a bargain to grab.
3. Ask why the seller cannot register a proper sale deed, and weigh the answer carefully.
4. Remember that a power of attorney can be revoked and does not convey ownership.
5. Confirm the seller's clear title before you part with any money.
6. Check that a bank will finance the property, since a refusal often signals a defective title.
7. Take legal advice before accepting any arrangement that avoids registration.

Does a general power of attorney transfer ownership of property?

No. The Supreme Court held in Suraj Lamp that a general power of attorney does not transfer ownership, and that a sale agreement with a power of attorney and a will is not a valid transfer either. Only a registered sale deed legally conveys immovable property. A power of attorney only authorises someone to act, it does not make them the owner.

Why are GPA sales cheaper?

GPA sales are cheaper mainly because they avoid the stamp duty and registration charges a proper sale deed attracts, and sometimes because they move properties with unclear title. That saving is exactly the problem. By skipping registration you skip the step that creates ownership, so you pay for a home you never legally own and cannot cleanly sell or finance later.

Can the seller take back a property sold on a GPA?

Potentially yes. Because a power of attorney does not transfer ownership, the seller remains the legal owner and can generally revoke the power of attorney, and it may lapse if the seller dies. The original owner or their heirs can then claim the property. This is one of the main reasons a GPA is unsafe as a substitute for a registered sale deed.

I already bought a property on a GPA. What should I do?

Seek legal advice promptly on regularising your title. The safest route is to get a proper registered sale deed executed while the seller is still willing and available, which converts your defective position into real ownership. Acting early reduces the risk that revocation, the seller's death, or a competing claim leaves you without title.

Last updated 2026-07-20. PropNewz Team.